Tag: discharge violation

The discharge injunction, which allows former debtors to be free from any efforts to collect former debt, is a primary feature of bankruptcy law in the United States. When creditors have systemically violated debtors’ discharge injunctions, some debtors have attempted to challenge those creditors through a class action lawsuit in bankruptcy court. However, the pervasiveness of class-waiving arbitration clauses likely prevents those debtors from disputing discharge injunction violations outside of binding, individual arbitration. This Note first discusses areas of disagreement regarding how former debtors may enforce their discharge injunctions. Then, it examines the types of disputes that allow debtors to collectivize in bankruptcy court.… Read More

Following the entry of a discharge in 2011 of his Chapter 13 case, First Federal Bank (“FFB”) continued to report on Mr. Myrick’s credit report with Equifax that he owed an outstanding balance of $41,603 that was past due by $2,000. In November 2014, Mr. Myrick submitted a dispute with Equifax regarding this balance, raising his bankruptcy discharge. Equifax sent a Automated Consumer Dispute Verification (“ACDV”) to FFB, which responded that the balance information was correct. Later in February 2015, Mr. Myrick again disputed the FFB trade line, this time attaching a copy of his discharge order. As the discharge order does not specifically list discharged claims, Equifax requested additional details regarding the account names, numbers and nature of the dispute. … Read More

Mr. Ennis filed a Chapter 7 bankruptcy, including First Federal as a creditor. While First Federal did activate a bankruptcy block to discontinue past due notifications, its continued to send computer generated monthly statements to Mr. Ennis, listing the balance, accrued interest and amount past due. Mr. Ennis’ counsel did send notices to First Federal regarding the bankruptcy filing and the extent of the automatic stay, but did not describe any specific wrong doing. These notices were sent to First Federal at its street address, rather than its mailing address. First Federal also had difficulties with the U.S. Postal Service delivery to its street address.… Read More

Despite having received notice of the bankruptcy filing and notice of the proof of claims deadline well before the expiration of the deadline and approximately thirteen months prior to confirmation of the Amerson’s Second Amended Plan, Flanders, who was represented by counsel during much toe the Chapter 11 proceeding, did not take any action in the bankruptcy proceeding to request relief from the automatic stay or to file a proof of claim. Despite that knowledge, Flanders made direct, post-petition threats to Amerson, including asserting multiple causes of action against Amerson.

As this was a Chapter 11 filed by individuals, the discharge was not entered at the time of confirmation, and Amerson did not request an early discharge.… Read More

Carolina Internet had an oral agreement to pay O’Dell 6.5% of its sales from its largest customer, believing that O’Dell could take that account away. When Carolina Internet filed Chapter 11, however, it did not list O’Dell as a creditor. That failure notwithstanding, O’Dell was aware of the bankruptcy, both as it was being planned and after it was filed. After filing, Carolina Internet continued to pay O’Dell, unlike other unsecured creditors, and belatedly included a budget item for $22,124.66 a month in “sales commissions”, that were discovered by the Creditor’s Committee to have been paid to O’Dell as a “kickback.” The Creditor’s Committee insisted that payments to O’Dell be returned and discontinued, but Carolina Internet, fearing the loss of its primary customer, sought to assume what it alleged was an oral executory contract with O’Dell.… Read More

The Debtor had, after purchasing a 3rd parties interest in an Illinois home, been given title to the home by his then fiance, Ms. Ward, subject to an agreement that he would reconvey the real property to her in the event he pre-deceased her or their relationship ended. So, of course, their relationship ended and he declined to reconvey the property to her. Ms. Ward then commenced a lawsuit in Illinois against the Debtor seeking reconveyance of the property and damages for breach of contract. The Debtor filed Chapter 7, during which Ms. Ward unsuccessfully sought denial of the Debtor’s discharge.… Read More

The Goldens loaned their then friends, the Malones, $14,700.00. The Goldens then filed bankruptcy, failing to disclose the existence of this loan as, either as an asset or otherwise. While his own bankruptcy was still pending, Mr. Golden commence collection attempts on this loan, with the parties relationship souring dramatically, with allegations of “scandalous behavior” being traded between Mr. Golden and Mr. Malone, including alcohol and drug use, trips to “adult entertainment establishments”, etc.. Eventually the Malones also filed bankruptcy and received a discharge. Mr. Golden continued to attempt to contact Mr. Malone, even after receiving warning letters from the Malone’s bankruptcy attorney, indicating that he planned to contact Mrs. … Read More

The Debtor filed Chapter 13, during which Friedman’s Jewelers filed a Proof of Claim, asserting that it was secured in the amount of $300.00 and unsecured for the balance. The Debtor subsequently converted to Chapter 7, then re-converted to Chapter 13, eventually confirming a plan treating Friedman’s as secured in the amount of $300.00.

Friedman’s itself filed bankruptcy and its assets were liquidated, with the Debtor’s account being purchased by Merchant’s Acquisition Group, L.L.C. (MAG). MAG retained BRM Recovery Services to collect on this account. The sale of this claim was not reported to the Trustee in the Debtors’ bankruptcy.… Read More

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The purpose of the NC Bankruptcy Expert blog is to provide legal professionals with a consolidated resource for updates and case summaries about issues and decisions affecting bankruptcy, foreclosures, mortgages, and debt collection.